IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/117006.html
   My bibliography  Save this paper

Social and institutional determinants of digital financial inclusion in Africa: A system GMM Approach

Author

Listed:
  • Evans, Olaniyi

Abstract

African nations have shown remarkable promise in digital financial services in recent years. However, much more remains to be done. Given this background, this study empirically investigates the social and institutional determinants of digital financial inclusion for a panel of 42 African countries using system GMM for the period 1995-2018. The empirical results show that social factors such as literacy, infrastructure, unemployment rate and standard of living have significant influence on digital financial inclusion. These results suggest that social realities matter for digital financial services. Equally, institutional factors such as political stability and absence of violence, control of corruption, regulatory quality, government effectiveness and rule of law have statistically significant and positive effects. These results suggest that better governance and better institutions correlate with faster digital financial inclusion. The estimates are robust to changes in estimation methods.

Suggested Citation

  • Evans, Olaniyi, 2022. "Social and institutional determinants of digital financial inclusion in Africa: A system GMM Approach," MPRA Paper 117006, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:117006
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/117006/1/MPRA_paper_117006.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. George Okello Candiya Bongomin & Joseph M Ntayi & John C. Munene & Charles Akol Malinga, 2018. "Mobile Money and Financial Inclusion in Sub-Saharan Africa: the Moderating Role of Social Networks," Journal of African Business, Taylor & Francis Journals, vol. 19(3), pages 361-384, July.
    2. Inessa Love, 2003. "Financial Development and Financing Constraints: International Evidence from the Structural Investment Model," The Review of Financial Studies, Society for Financial Studies, vol. 16(3), pages 765-791, July.
    3. Olaniyi Evans, 2019. "Digital politics: internet and democracy in Africa," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 169-191, January.
    4. Peterson K. Ozili, 2018. "Impact of digital finance on financial inclusion and stability," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 329-340, December.
    5. Robyn Broadbent & Theo Papadopoulos, 2013. "Impact and benefits of digital inclusion for social housing residents," Community Development, Taylor & Francis Journals, vol. 44(1), pages 55-67, February.
    6. Evans, Olaniyi, 2016. "Determinants of Financial Inclusion in Africa: A Dynamic Panel Data Approach," MPRA Paper 81326, University Library of Munich, Germany.
    7. David-West, Olayinka, 2016. "The path to digital financial inclusion in Nigeria: Experiences of Firstmonie," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 9(4), pages 256-273, January.
    8. Lan Khanh Chu, 2019. "Determinants of financial inclusions: comparing high, middle, and low-income countries," Economics Bulletin, AccessEcon, vol. 39(2), pages 1449-1457.
    9. Goldstein, Yazan, 2016. "The model for sustainable digital financial inclusion in Jordan," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 9(4), pages 241-245, January.
    10. Ozili, Peterson Kitakogelu, 2018. "Impact of Digital Finance on Financial Inclusion and Stability," MPRA Paper 84771, University Library of Munich, Germany.
    11. Peric, Kosta, 2015. "Digital financial inclusion," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 9(3), pages 212-214, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Evans, Olaniyi, 2022. "The criticality of institutions and the macroeconomy for education outcomes in Africa," MPRA Paper 118197, University Library of Munich, Germany.
    2. Evans, Olaniyi, 2021. "The Curious Case of Petro-Monetary Transmission Mechanism in Oil-Producing Countries: An Analysis of the Effect of Oil Price on Inflation in Nigeria," MPRA Paper 118198, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gallego-Losada, María-Jesús & Montero-Navarro, Antonio & García-Abajo, Elisa & Gallego-Losada, Rocío, 2023. "Digital financial inclusion. Visualizing the academic literature," Research in International Business and Finance, Elsevier, vol. 64(C).
    2. Rahmanda Muhammad Thaariq & Arif Anindita & Hafizha Dea Iftina, 2021. "The Internet Miracle: The Impact Of Internet Access On Household Saving In Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 24(2), pages 255-282, June.
    3. Zhou, Chao & Liao, Jinglin, 2024. "Home country digital finance development and post-entry internationalization speed of emerging market SMEs: Empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    4. Kouladoum, Jean-Claude & Wirajing, Muhamadu Awal Kindzeka & Nchofoung, Tii N., 2022. "Digital technologies and financial inclusion in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 46(9).
    5. David Mhlanga, 2020. "Industry 4.0 in Finance: The Impact of Artificial Intelligence (AI) on Digital Financial Inclusion," IJFS, MDPI, vol. 8(3), pages 1-14, July.
    6. Mateusz Folwarski, 2021. "The FinTech Sector and Aspects on the Financial Inclusion of the Society in EU Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 459-467.
    7. Ruixin Su & Tong Zheng & Yuzhao Zhong & Weizhou Zhong, 2023. "Role of Digital Inclusive Finance for High-Quality Business Development: A Study of China’s “Five Development Concept” Policy," Sustainability, MDPI, vol. 15(15), pages 1-21, August.
    8. Lin Tai & Fu Xiaopeng & Gong Ting & Xu Xinpeng & Stavros Sindakis & Gazal Showkat, 2024. "Assessing the Relationship Between Digital Inclusive Finance and the Well-Being of Elderly Individuals: A Study of Life Satisfaction," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 9597-9628, June.
    9. Amit Pandey & Ravi Kiran & Rakesh Kumar Sharma, 2023. "Investigating the Determinants of Financial Inclusion in BRICS Economies: Panel Data Analysis Using Fixed-Effect and Cross-Section Random Effect," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    10. Dongjing Chen & Xiaotong Guo, 2023. "Impact of the Digital Economy and Financial Development on Residents’ Consumption Upgrading: Evidence from Mainland China," Sustainability, MDPI, vol. 15(10), pages 1-25, May.
    11. Song, Quanyun & Li, Jie & Wu, Yu & Yin, Zhichao, 2020. "Accessibility of financial services and household consumption in China: Evidence from micro data," The North American Journal of Economics and Finance, Elsevier, vol. 53(C).
    12. Wang, Yi-Ran & Ma, Chao-Qun & Ren, Yi-Shuai, 2022. "A model for CBDC audits based on blockchain technology: Learning from the DCEP," Research in International Business and Finance, Elsevier, vol. 63(C).
    13. Peterson K. Ozili & David Mhlanga & Rym Ammar & Marwa Fersi, 2024. "Information Effect of Fintech and Digital Finance on Financial Inclusion during the COVID-19 Pandemic: Global Evidence," FinTech, MDPI, vol. 3(1), pages 1-17, January.
    14. Surjeet Dalal & Bijeta Seth & Magdalena Radulescu & Carmen Secara & Claudia Tolea, 2022. "Predicting Fraud in Financial Payment Services through Optimized Hyper-Parameter-Tuned XGBoost Model," Mathematics, MDPI, vol. 10(24), pages 1-17, December.
    15. Ozili, Peterson K, 2020. "Financial inclusion: a strong critique," MPRA Paper 101813, University Library of Munich, Germany.
    16. Rayenda Khresna Brahmana & Maria Kontesa & Josephine Tan-Hwang Yau, 2024. "Does information seeking moderate the relationship between financial loan inclusion and Fintech P2P lending?," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(1), pages 171-185, March.
    17. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    18. Wang, Weilong & Xiao, Deheng & Wang, Jianlong & Wu, Haitao, 2024. "The cost of pollution in the digital era: Impediments of air pollution on enterprise digital transformation," Energy Economics, Elsevier, vol. 134(C).
    19. Girish Garg & Mohd Shamshad & Nikita Gauhar & Mosab I. Tabash & Basem Hamouri & Linda Nalini Daniel, 2023. "A Bibliometric Analysis of Fintech Trends: An Empirical Investigation," IJFS, MDPI, vol. 11(2), pages 1-15, June.
    20. Yue, Sishi & Yang, Mo & Dong, Dayong, 2024. "Do enterprises adopting digital finance exhibit higher values? Based on textual analysis," The North American Journal of Economics and Finance, Elsevier, vol. 73(C).

    More about this item

    Keywords

    digital financial services; social and institutional determinants;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:117006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.